UPDATE, 2:30 PM: Massachusetts Secretary of Commonwealth William Galvin is conducting his own investigation into what Morgan Stanley told big investors about Facebook, and when the disclosures took place. A spokesman tells Reuters that the office has issued a subpoena to Morgan Stanley regarding “the analyst’s discussion with certain institutional investors about the revenue prospects for Facebook.”
PREVIOUS, 1:07 PM: Facebook CEO Mark Zuckerberg may rue the day he agreed to take his company public. The share price fell 8.9% today — to $31.01, or $6.99 below the offering price on Friday — after SEC chairman Mary Schapiro said that her agency plans to investigate “issues” involving the IPO. While she wasn’t specific, her comment came as Reuters reported that the consumer Internet analyst for Morgan Stanley, Facebook’s lead underwriter, recently slashed his revenue forecasts for Q2 and all of 2012 — and that news was passed along to institutional investors during the company’s road show but not to the public. If true, then it could have violated laws that bar companies from selectively disclosing important information to certain shareholders. It also could explain why institutional buyers chose not to buy Facebook shares as the price fell on Monday and today. “This is a classic example of investor greed, including institutional greed and underwriter greed and company greed,” Vanguard CEO Jack Bogle said on CNBC. ”So the message is, when all the … Read More »
The Facebook filing values Mark Zuckerberg stake at $16 billion. Facebook said its 27-year-old founder and CEO owns more than a quarter of the company, or roughly 534 million shares. Those are just some of the numbers in the SEC filing to issue stock that will trade under the symbol “FB.” Facebook says that it generated $1B in net income last year, up 65% from 2010, on revenues of $3.7B, up 88%. It has 845M monthly active users, 100B friendships, and 2.7B likes and comments per day. But Zuckerberg warns potential investors in the filing that Facebook “was not originally created to be a company. It was built to accomplish a social mission — to make the world more open and connected….Simply put: we don’t build services to make money; we make money to build better services. And we think this is a good way to build something. These days I think more and more people want to use services from companies that believe in something beyond simply maximizing profits.”
Like many Silicon Valley execs, Zuckerberg expects his stock to provide his personal financial reward. Before the IPO he controls 56.9% of Facebook’s voting shares. That mostly comes from his control of 1.1B Class B shares which have 10 votes apiece as opposed to the Class A shares to be sold to the public which have 1 vote apiece. His compensation package last year came to $1.5M (including $483,333 in salary, $220,500 in bonus, and $783,529 in other … Read More »
One of the tech world’s most eagerly anticipated public offerings could take place next week, with Facebook potentially raising about $10B from shares that would value the company at as much as $100B, The Wall Street Journal reports. If the numbers are correct, then the Facebook IPO would be the largest-ever tech offering — well ahead of the $5.9B sale in 2000 for shares in semiconductor company Infineon Technologies. But first Facebook has to decide which Wall Street bank will lead its campaign, which the paper says could be worth “tens of millions of dollars in fees as well as bragging rights.” Morgan Stanley appears to be on top. But Goldman Sachs is still in the running despite its snafu last year when a $1.5B private offering it led for Facebook ended up being restricted to overseas investors. The banker made that decision after the SEC began to investigate whether Goldman had run afoul of the law that bars “general solicitation and advertising” for a private offering.
That’s the valuation that the king of social media hopes investors will accept as it considers whether to make one of the biggest public stock offerings ever this spring, The Wall Street Journal reports. The paper says that Mark Zuckerberg’s company wants to raise $10B and could file documents at the SEC to begin the process by the end of this year. Visa, General Motors, and AT&T Wireless are the only U.S. companies that have collected more than $10B in an initial public offering. Up to now, Zuckerberg has been cool to the idea of going public, which would require Facebook to disclose a lot of information about its finances. But he may have to give the public a peek even if he keeps the company private: He’ll have more than 500 investors by year end, the Journal says, and the SEC requires companies that cross that threshold to open up about some of their numbers. The figures are sure to be impressive: The company is believed to generate more than $4B a year in revenue. Read More »
Banking on the smart phone boom continuing, the 12-year-old maker of software that enables users to watch live TV today filed to raise as much as $75M in an IPO. The filing did not indicate how many shares it will offer or the price. CBS, Fox and Disney’s ABC and ESPN all have content deals with MobiTV, which has seen its minutes streamed grow from 264 million in 2007 to 1.4 billion in 2010. Gefinor Ventures is the largest investor in MobiTV, along with Oak Investment partners. JPMorgan Chase & Co and Deutsche are managing the IPO for the Emeryville, Calif. firm, which was founded by Paul Scanlan, Phillip Alvelda and Jeff Annison.